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Tuesday, 4 August 2015

Illicit credit institutions pose threat to Iran’s banking system - FT.com

Illicit credit institutions pose threat to Iran’s banking system - FT.com:



"When Rajabali realised his returns would be greater if he put his money in an illegal credit institution rather than into his car repair business, he acted quickly.



He sold the 1,000 sq m property in the northeastern city of Semnan to an illegal credit institution this year for 30bn rials ($1.01m), sacked about half a dozen workers and deposited the money with the same institution for an interest rate of 23 per cent — in the process realising a far greater income than had he stuck with the garage.



“The credit institution put a condition that my father-in-law would not receive his money from the sale for two years,” said Mansoor, his son-in-law. “[But] he receives 60m tomans [$20,249] each month in interest [since February]. At best, his profit from the garage was 7m tomans [$2,362] a month.”"



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Time to move beyond ‘emerging markets’ - FT.com

Time to move beyond ‘emerging markets’ - FT.com:



"“As we are . . . prisoners of the words we pick, we had better pick them well,” said Giovanni Sartori, the Italian political scientist. For a long time since they were first coined in the 1980s, the words “emerging markets” appeared to have been well-chosen, such was their popularity as a description for a big chunk of the planet. As the world evolves, the term is progressively losing its purchase over the collective consciousness because it imprisons perceptions within parameters that are increasingly false or unhelpful.



For one thing, several “emerging markets” — particularly recession-hit Brazil and Russia — are no longer emerging in an economic sense but rather regressing at a rapid clip. For another, the sense of equivalence that the term bestows on the countries under its umbrella is entirely bogus. Qatar, the United Arab Emirates and Taiwan all boast a gross domestic product per capita that is higher than that of the UK, but find themselves occupying the same definitional space as India, the Philippines and Indonesia.



Most of all though, the longstanding hierarchy that put “emerging markets” at the periphery and “developed markets” at the core of global affairs may be unravelling. In purchasing power parity terms, developed countries contribute less to global output than their emerging counterparts, after their share of world GDP dwindled to 43 per cent in 2014 from 54 per cent in 2004."



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Unruffled in Riyadh, Saudis Stick With Stocks as Crude Tumbles - Bloomberg Business

Unruffled in Riyadh, Saudis Stick With Stocks as Crude Tumbles - Bloomberg Business:



"The Saudi stock market is showing its mettle in the face of the latest oil rout that drove Brent into a bear market in July.



The kingdom’s Tadawul All Share Index has retreated 4.2 percent since the end of June, compared with declines of 15 percent in Brazil in dollar terms, 11 percent in Russia and almost 10 percent in Nigeria. Brent, the benchmark oil grade against which Saudi crude is priced, has tumbled 21 percent in that period.



The resilience shows how the world’s biggest crude producer is riding out the slump thanks to the confidence of locals who account for almost all the $525 billion market’s investors and the government’s determination to press ahead with infrastructure spending. That may give comfort to foreigners considering buying Saudi stocks after the nation opened the market to overseas investors for the first time on June 15."



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MIDEAST STOCKS-Most Gulf markets fall after oil tumbles | Reuters

MIDEAST STOCKS-Most Gulf markets fall after oil tumbles | Reuters:



"Most major Gulf stock markets fell on Tuesday after Brent oil tumbled 5 percent, briefly falling below $50 per barrel, although some supportive economic and corporate news softened the blow.



Saudi Arabia's main index edged down 0.6 percent as petrochemicals giant Saudi Basic Industries slipped 1.4 percent. The firm's profits are sensitive to oil prices, which plunged on Monday although Brent regained a little ground on Tuesday to trade just above $50.



Most other petrochemicals companies also fell and the sector's index was down 1.0 percent."



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MIDEAST STOCKS-Gulf markets edge down after oil plunges | Reuters

MIDEAST STOCKS-Gulf markets edge down after oil plunges | Reuters:



"Most Gulf stock markets edged down in early trade on Tuesday as positive earnings reports failed to offset the impact of Brent oil dropping 5 percent to below $50 per barrel.



Dubai's stock index fell 0.7 percent with most stocks negative on very low volumes. Heavyweight developer Emaar Properties, which has tumbled more than 10 percent since its flotation, slid 1.5 percent.



Shareholders of Emaar's Egyptian subsidiary submitted a total of 487.3 million shares to be bought back by the company on Monday, more than five times the 90 million that Emaar Misr agreed to repurchase at the initial public offer price of 3.80 pounds."



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Emerging markets: Redrawing the world map - FT.com

Emerging markets: Redrawing the world map - FT.com:



"When Matteo Ricci, the Italian 16th century Jesuit missionary, travelled to China to win converts to his faith, he found that his European maps — which showed China relegated to the cartographical margins — failed to endear him to his hosts. So he redrew them. The resulting world map of 1602 placed China at its centre, an accommodation that is said to have helped him win influence among the Middle Kingdom’s elite.



Ricci’s revisions were made on woodcuts and paper. Now, commentators say, it is the world’s mental map that is in dire need of an overhaul, particularly when it comes to the practice of categorising countries as “emerging” or “developed” markets.



The current economic hierarchy, which places emerging nations at the periphery and developed markets at the core of world affairs, no longer accurately describes a world in which EM countries contribute a bigger share to global gross domestic product than their developed counterparts, when measured by purchasing power parity. Nor does the capacious category, which lumps together countries of such diverse economic strengths as China and the Czech Republic, serve to illuminate crucially different realities between these nations."



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$50 oil - Authers' Note - Markets & Investing Video - FT.com

$50 oil - Authers' Note - Markets & Investing Video - FT.com:


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Brent crude slides below $50 as Opec production accelerates - FT.com

Brent crude slides below $50 as Opec production accelerates - FT.com:



"Oil slid below $50 a barrel on Monday, extending last month’s losses to hit the lowest level since January due to signs that growing production will continue to outstrip demand.



ICE September Brent crude — the global benchmark — fell 18 per cent in July. In the first session of August, it fell another 4 per cent, losing more than $2 a barrel to hit a six-month low of $49.81.



The renewed price pressure came as market participants focus on accelerating production from Opec countries, such as Saudi Arabia and Iraq, where output has reached new records amid a global competition for customers."



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Kurds to start regular payments to oil groups - FT.com

Kurds to start regular payments to oil groups - FT.com:



"The government of the Iraqi region of Kurdistan has said it will start making monthly payments to international oil companies operating there from September, boosting the producers’ share prices.



The plunge in crude prices, and a dispute over oil revenues between the semi-autonomous region and the national government in Baghdad, have meant the Kurdistan Regional Government faces a cash crunch. Foreign corporations are owed hundreds of millions of dollars.



The companies hit by the delay in payments for oil production have seen their shares fall sharply over the past year, and the step towards regular payments from the KRG saw them rebound on Monday."



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